U.S. leveraged loan volume totaled $9.2 billion during the week, down from $14-15 billion in each of the previous two weeks, as issuers continue to take advantage of a relatively hot market, though with smaller deals, according to S&P Capital IQ/LCD.

With the recent activity, year-to-date loan volume totals $367 billion, compared to $384 billion at this point last year (of course, there was a record $605 billion in leveraged loan issuance in all of 2013). July is turning out to be a relatively sleepy month volume-wise, with $38 billion in issuance so far, down noticeably from the $64 billion during June.

Despite the dip in issuance, the loan market remains hot, as LCD’s Chris Donnelly explains in his weekly market commentary:

Judging by activity over the past week, recent chatter about an overheated loan market looked to be largely justified. InvestorInvestor demand was hot and heavy this week, with pricing tightening on no fewer than a dozen transactions alongside other aggressive moves. It was primarily the marginal transactions that saw any degree of difficulty.

Of note this week, Expro Oilfield Services brought to market a $1.52 billion term loan that backed repayment of mezzanine debt. The issuer, which is owned by Goldman Sachs PIA, Arle Capital Partners, Alpinvest Partners and management, has filed for an IPO. The credit is covenant-lite, meaning it has less restrictions on the issuer than does traditional leveraged loans.

Also of note this week, Berkshire Partners launched $415 million in loans to institutional investors, backing the LBO of Portillo Restaurant Group. The credit is covenant-lite as well, and includes a second-lien portion rated CCC by S&P, says LCD’s Kerry Kantin.

Befitting the hot market, leveraged loan yields continue under pressure. The average single-B credit priced over the past 30 days did so to yield 5.10%, down from 5.32% at the end of June, while better-quality (double-B) loans are yielding 4.16%, down a bit from 4.19% at month-end, according to LCD.

This activity comes as investors continue to back away from the leveraged loan asset class. U.S. loan funds this week saw a $413 million cash outflow, the 13th withdrawal in the past 15 weeks, totaling $6.6 billion, according to Lipper. That’s nothing compared to high yield bond investors, however, who are fleeing the market at a pace not seen since Ben Bernanke’s Taper Talk pummeled the market in June 2013.

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